Backfire

For weeks the U.S. has turned up the heat on the giant Swedish ball-bearing trust, SKF, trying to make it stop exports to Germany. Last week the heat backfired. In Philadelphia, where SKF's U.S. subsidiary has three plants, production of bearings--now a No. 1 shortage in the

U.S. -- slumped drastically. The reason: SKF employes, confused by all the niff-naw, thought that the bearings they were making were going to Germany.

Hastily, WPB Vice Chairman Bill Batt, who is also president of the U.S. subsidiary SKF Industries, Inc., flew to Philadelphia. Flanked by Army and Navy offi cials, he stood on a flag-bedecked plat form to assure his 8,000 workers that SKF Industries is an "American company operated by American people." The Treasury and the Alien Property Custodian, which have been quietly probing SKF Industries, chimed in with praise for its "excellent'' war record. But many a question about SKF was still unanswered.

Control to Batt. Of one thing there was little doubt -- President Batt controls SKF Industries completely. In April 1940, when it appeared that the Nazis would in vade Sweden, he began negotiations with SKF (Sweden), which is 99.5% Swedish-owned, and which then owned 74% of SKF Industries and another subsidiary, SKF Steel. At Batt's request, SKF turned over to him its U.S. holdings, in trust, till war's end. Last week Batt brushed off rumors that the real boss of SKF Industries is Count Hugo von Rosen, whose brother is a Swedish quisling. Said Batt: Count von Rosen is only a salesman.

To President Batt's explanations, SKF in Sweden last week added its own: that bearing shipments to Germany ($7,000,000 in 1944) are less than 10% of Germany's needs. The U.S. War Department was not so sure. It lost 60 Flying Fortresses and 600 men bombing Germany's ballbearing center of Schweinfurt, where the chief producer is an SKF subsidiary (TIME, Oct. 5). It suspects that SKF (Sweden) may now be supplying as high as 70% of Germany's needs of some special bearings.

Ace in the Hole. Fortnight ago, Foreign Economics Administrator Leo Crowley sent shrewd Stanton Griffis, executive committee chairman of Paramount Pictures, to Stockholm. He offered SKF up to $30,000,000 to buy for the U.S. all of SKF's output. If this fails, the U.S. will have virtually exhausted its pressure against SKF through its U.S. subsidiaries.

The Treasury has revoked permission for SKF Industries to send dividends to Sweden. But SKF can get along without them very well, as it now has upwards of $50,000,000 of cash on hand. Washington buzzed with talk that the U.S. will chop off the exports of SKF Industries to Latin America, which have been used to retain SKF's markets there. But these amount to a measly .2% of the production of SKF industries.

The U.S. still has an ace in the hole. It can blacklist all U.S. companies with Swedish affiliations, which have some $125,000,000-worth of assets in this country. This would permit the U.S. to cut off transfer of dividends and earnings to Sweden. At week's end, Leo Crowley's FEA was cautiously studying such a move. But the State Department gave the screw a turn. It added 38 more Swedish firms in neutral nations to its blacklist.

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